EUROPEAN COMMODITIES UPDATE: Brent hovers around YTD peaks while metals are subdued by the firmer Buck

Analysis details (10:16)

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  WTI and Brent futures are somewhat choppy within tight ranges amid quiet newsflow this European morning and ahead of key risk events including US CPI on Wednesday, the ECB decision on Thursday, and Chinese activity data on Friday. Yesterday, the crude contracts settled relatively flat as the rally seen at the start of the week lost momentum. That being said, Brent holds near USD 91.00/bbl with the continuous contract printing a fresh YTD peak of USD 91.45/bbl yesterday. “The tightness in the market and expectations that this will continue through until the end of the year suggest that prices will remain well supported”, say ING, with participants cognizant of higher distillates demand as we head to the winter period in the Northern Hemisphere. Ahead, participants will see the weekly Private Inventory Data (following notable draws seen since mid-August), but before that, the OPEC Monthly Oil Market Report (MOMR) will be released, although this is likely to prove stale following Saudi-Russo announcement on production and export curb extensions respectively. Nonetheless, the MOMR could be dissected for the group’s diagnosis of the Chinese economy's health, alongside refining and products markets commentary. WTI Oct sits north of USD 87.50/bbl (in a USD 87.22-85/bbl range), while Brent Nov trades just under USD 91/bbl (in a 90.52-92/bbl range).


• Over to gas, Dutch TTF remains supported with modest intraday gains as the Australian LNG strike and the extended maintenance at Norwegian fields keep prices underpinned. Furthermore, reports suggested China is looking to buy LNG again in the latest risk to the global gas market's delicate balance, according to Bloomberg sources, with Unipec releasing a tender to purchase more than a dozen shipments for this winter, in addition to deliveries through the end of 2024. Desks continue to flag the possibility of increased competition for LNG amid the aforementioned supply constraints coupled with the seasonal demand ahead of winter.


• Looking at metals, spot gold is softer intraday amid the firmer Dollar, but the yellow metal remains within yesterday’s ranges and trades on either side of its 200 DMA (USD 1,920.03/oz today) after finding support at the 21 DMA (USD 1,916.41/oz today) yesterday, with participants eyeing this week’s key risk events. Base metals see modest softness across the board on the LME and CME amid the broader Dollar strength and cautious trade across stocks, although Singapore iron ore futures hit over five-month highs with analysts citing better-than-expected Chinese loans data and pre-holiday stocking ahead of the Chinese mid-Autumn festival at the end of the month.

12 Sep 2023 - 10:18- MetalsEU Research- Source: Newsquawk